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MPG Q2 2015 Earnings Report

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LIGHT VEHICLE COMMERCIAL INDUSTRIAL MPG Second Quarter and June Year to Date 2015 Earnings Presentation August 4, 2015


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Disclaimer This presentation and any related statements contains certain “forward-looking statements” about MPG’s financial results and estimates and business prospects within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “project,” “believes,” “seeks,” “targets,” “forecast,” “estimates,” “will” or other words of similar meaning and include, but are not limited to, statements regarding the outlook for the Company’s future business, prospects, and financial performance; the industry outlook, our backlog and our 2015 financial guidance. Forward-looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory, and other factors and risks, including, but not limited to, the following: volatility in the global economy impacting demand for new vehicles and our products; a decline in vehicle production levels, particularly with respect to platforms for which we are a significant supplier, or the financial distress of any of our major customers; seasonality in the automotive industry; our significant competition; our dependence on large-volume customers for current and future sales; a reduction in outsourcing by our customers, the loss or discontinuation of material production or programs, or a failure to secure sufficient alternative programs; our failure to offset continuing pressure from our customers to reduce our prices; our inability to realize all of the sales expected from awarded business or fully recover pre-production costs; our failure to increase production capacity or over-expanding our production in times of overcapacity; our reliance on key machinery and tooling to manufacture components for powertrain and safety-critical systems that cannot be easily replicated; program launch difficulties; a disruption in our supply or delivery chain which causes one or more of our customers to halt production; work stoppages or production limitations at one or more of our customer’s facilities; a catastrophic loss of one of our key manufacturing facilities; failure to protect our know-how and intellectual property; the disruption or harm to our business as a result of any acquisitions or joint ventures we make; a significant increase in the prices of raw materials and commodities we use; the damage to or termination of our relationships with key third-party suppliers; our failure to maintain our cost structure; the incurrence of significant costs if we close any of our manufacturing facilities; potential significant costs at our facility in Sandusky, Ohio; the failure of or disruptions in our information technology networks and systems, or the inability to successfully implement upgrades to our enterprise resource planning systems; the incurrence of significant costs, liabilities, and obligations as a result of environmental requirements and other regulatory risks; extensive and growing governmental regulations; the adverse impact of climate change and related energy legislation and regulation; the incurrence of material costs related to legal proceedings; our inability to recruit and retain key personnel; any failure to maintain satisfactory labor relations; pension and other postretirement benefit obligations; risks related to our global operations; competitive threats posed by global operations and entering new markets; foreign exchange rate fluctuations; increased costs and obligations as a result of becoming a public company; the failure of our internal controls to meet the standards required by Sarbanes-Oxley; our substantial indebtedness; our inability, or the inability of our customers or our suppliers, to obtain and maintain sufficient debt financing, including working capital lines; our exposure to a number of different tax uncertainties; the mix of profits and losses in various jurisdictions adversely affecting our tax rate; disruption from the combination of our operations and diversion of management’s attention; our limited history of working as a single company and the inability to integrate HHI, Metaldyne, and Grede successfully and achieve the anticipated benefits. For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this press release and in our public filings, including under the heading “Risk Factors” in our filings that we make from time to time with the Securities and Exchange Commission. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law. Non-GAAP Financial Measures Combined Net Sales We define Combined Net Sales as the net sales of MPG plus the net sales of Grede prior to our acquisition of Grede. We present Combined Net Sales because our management considers it to be a useful, supplemental indicator of our performance when comparing periods before and after our acquisition of Grede. For a reconciliation of Combined Net Sales to net sales, the most directly comparable GAAP measure, see Appendix to this presentation. Adjusted EBITDA and Combined Adjusted EBITDA We define Adjusted EBITDA as net income (loss) before interest expense, provision for (benefit from) income taxes and depreciation and amortization, with further adjustments to reflect the additions and eliminations of certain income statement items, including (i) gains and losses on foreign currency and fixed assets and debt transaction expenses, (ii) stock-based compensation and other non-cash charges, (iii) sponsor management fees and other income and expense items that we consider to be not indicative of our ongoing operations, (iv) specified non-recurring items and (v) other adjustments. We define Combined Adjusted EBITDA as Adjusted EBITDA plus the Adjusted EBITDA of Grede prior to our acquisition of Grede. We believe Adjusted EBITDA is used by investors as a supplemental measure to evaluate the overall operating performance of companies in our industry. Management uses Adjusted EBITDA (i) as a measurement used in comparing our operating performance on a consistent basis, (ii) to calculate incentive compensation for our employees, (iii) for planning purposes, including the preparation of our internal annual operating budget, (iv) to evaluate the performance and effectiveness of our operational strategies and (v) to assess compliance with various metrics associated with our agreements governing our indebtedness. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating performance in the same manner as our management. We present Combined Adjusted EBITDA because our management considers it to be a useful, supplemental indicator of our performance when comparing periods before and after our acquisition of Grede. For a reconciliation of Adjusted EBITDA and Combined Adjusted EBITDA to net income, the most directly comparable measure determined under U.S. generally accepted accounting principles (“GAAP”), see Appendix to this presentation Adjusted Free Cash Flow and Combined Adjusted Free Cash Flow We define Adjusted Free Cash Flow as Adjusted EBITDA less capital expenditures. Capital expenditures can be found in our consolidated statements of cash flows as a component of cash flows from investing activities. We define Combined Adjusted Free Cash Flow as Adjusted Free Cash Flow plus the Adjusted Free Cash Flow of Grede prior to our acquisition of Grede. We present Adjusted Free Cash Flow because our management considers it to be a useful, supplemental indicator of our performance. When measured over time, Adjusted Free Cash Flow provides supplemental information to investors concerning our results of operations and our ability to generate cash flows to satisfy mandatory debt service requirements and make other non-discretionary expenditures. We present Combined Adjusted Free Cash Flow because our management considers it to be a useful, supplemental indicator of our performance when comparing periods before and after our acquisition of Grede. For a reconciliation of Adjusted Free Cash Flow and Combined Adjusted Free Cash Flow to net income, the most directly comparable GAAP measure, see Appendix to this presentation. Combined Non-GAAP CapEx We define Combined CapEx as the capital expenditures of MPG (“CapEx”) plus the capital expenditures of Grede prior to our acquisition of Grede. We present Combined CapEx because our management considers it to be a useful, supplemental indicator of our performance when comparing periods before and after our acquisition of Grede. For a reconciliation of Combined CapEx to CapEx, the most directly comparable GAAP measure, see “GAAP RECONCILIATION”. 2


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Agenda  Introduction Paul Suber  Q2 and Year to Date June 2015 Highlights and Market Outlook George Thanopoulos  Financial Results and 2015 Guidance Mark Blaufuss  Q & A Session George Thanopoulos Mark Blaufuss Paul Suber Vice President of Investor Relations Chief Executive Officer Chief Financial Officer and Treasurer 3


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Q2 AND YEAR TO DATE JUNE 2015 HIGHLIGHTS AND MARKET OUTLOOK


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Driving Value Long – Term Net Sales Target of > $4 Billion 2015 – 2017 2018 and Beyond o Secure growth through new business wins o Ramp-up of new programs o Execute on vertical integration/cross-selling o Capture value-added, powertrain content o Leverage cash flow model o Continue global expansion Focus on Strong Profitability and Cash Flow Generation Benefit from Expected Growth in Powertrain and SafetyCritical Components Debt Reduction Maintain or Grow Dividend Take Advantage of Cross-Sell Opportunities Capitalize on Global Scale and Capabilities 5


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Key Highlights Q2 2015 Net Sales $800.2 $1,565.4 Adjusted EBITDA $153.6 Adjusted EBITDA Margin1 YTD June 2015 $286.2 All amounts in millions USD except EPS 19.2% 18.3% 16.7% Adjusted EBITDA Margin 19.2% 18.3% Adjusted Free Cash Flow2 $99.3 $171.2 12.4% 10.9% $0.64 $1.11 Adjusted Free Cash Flow Margin Fully Diluted EPS 15.4% 2012 o o o o o 1. 2. 17.3% 2013 2014 Q2 2015 YTD 2015 2nd quarter results reflect continued EBITDA margin expansion Adjusted free cash flow margin over 10% for both quarter and June YTD Record year to date new business awards on fuel efficient engines and transmissions On-going headwinds from F/X , metals and industrial market Balanced use of cash to drive value creation Combined Adjusted EBITDA / Combined net sales (Non-GAAP) Adjusted EBITDA less Capex Strong Second Quarter and YTD June Financial Results 6


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Second Quarter 2015 Cash Flow Allocation Reinvesting in the Business Capital investment to drive future growth and returns $54 million in Capital Investment Accelerating our Deleveraging Voluntary term debt repayment doubled in Q2 versus Q1 $20 million in Debt Prepayment Rewarding our Key Stakeholders Q2 Dividend declared of $0.09/share for shareholders of record on August 17th, payable on August 31st ~$6 million Dividend or $0.09 Per Share Balanced Use of Cash Flow 7


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Growth Update oMPG was formed to accelerate profitable growth oNew business awards of greater than $500 million* booked through YTD June 2015  Awards focused on new fuel efficient, global engines and transmissions  Many programs include vertical integration capabilities of MPG 4000 3500 3000 2500 Record new business awards of >$500 million* 2000 1500 *New business is peak annual Net Sales. Programs generally launch and ramp up over the next 5 years. 8


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Building Our Future oStrategic expansion to support growth  New program awards driving growth oPlant expansion of our highly efficient facilities in U.S., Mexico and China  Expansions will utilize existing management teams to leverage cost structure  Growth of global leadership products for advanced engines and transmissions U.S. Mexico Mexico China 9


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Continued Customer Recognition Ford Excellence Award Given to Metaldyne 10


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Market Outlook – Light Vehicle North American Light Vehicle Production1 17.0 2014 17.5 17.9 18.3 18.6 European Light Vehicle Production1 20.1 20.3 20.7 21.3 22.1 MPG 2014 Geographic Footprint2 Rest of World 4% EU 13% 2015 2016 2017 2018 2014 2015 2016 2017 2018 North America 83% o Positive overall outlook in primary regions o Minimal exposure for MPG in weaker regional markets (India and Brazil) 1. 2. Vehicle Production in millions: IHS June 2015 Based on Combined Net Sales 2014 Strong Outlook for Primary Light Vehicle Markets 11


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Market Outlook – Commercial and Industrial North America Class 5-8 Vehicle Production1 522 557 525 495 508 226 230 235 247 250 296 327 290 248 258 2014 2015 2016 2017 o Class 5-8 vehicle production continues to be strong 2018 FTR Class 8 ACT Class 5-7 MPG 2014 End Market Contribution2 Industrial 9% Other 1% Commercial 12% Light Vehicle 78% 1. 2. o Industrial customers have announced production decreases (Caterpillar and John Deere) o MPG is rationalizing two industrial focused foundries, reducing overhead and improving efficiency Vehicle Production in thousands: FTR and ACT June 2015 Based on combined Net Sales 2014 MPG Actions Aligned with Market Demand 12


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FINANCIAL RESULTS AND 2015 GUIDANCE


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Second Quarter Financial Results Second Quarter ($ in Millions) 2015 2014 Difference % Change Net Sales $800.2 $641.3 $158.9 25% Adjusted EBITDA1 153.6 123.0 30.6 25% Capex 54.3 27.3 27.0 Adjusted Free Cash Flow 2 $99.3 $95.7 $3.6 o 25% growth in Net Sales and Adjusted EBITDA o Continued strong Adjusted Free Cash Flow 1. See Appendix for reconciliation to GAAP 2. Defined as Adjusted EBITDA less Capex Significant Year Over Year Growth 14


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Second Quarter Bridge 2014 – 2015 165.1 Net Sales Macro Effects Growth ($ in Millions) 0.4 0.1 28.8 (20.9) $835.7 $641.3 Q2 2014 Grede Acquisition (Apr - May 2015) Volume/Mix Price Other Metals Q2 2015 Macro Effects 8.9 26.3 $800.2 Q2 2015 Foreign Currency Constant FX & Metals Growth Adjusted EBITDA1 (14.6) 0.1 0.8 (2.4) (1.4) (1.7) $156.7 $153.6 $123.0 Q2 2014 Grede Acquisition (Apr - May 2015) Volume/Mix Price Perf/Econ/Cost SG&A/Other Q2 2015 Performance/ Reductions Constant FX & Economics/ Metals Cost Foreign Currency Metals Q2 2015 Reductions 1. Non-GAAP, see Appendix for reconciliation to GAAP Strong Second Quarter Impacted by Macro Effects 15


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June Year to Date Financial Results First Six Months ($ in Millions) 2015 2014 Difference % Change $1,565.4 $1,181.8 $383.6 32% Adjusted EBITDA1 286.2 222.7 63.5 29% Capex 115.0 58.1 56.9 Adjusted Free Cash Flow 2 $171.2 $164.6 $6.6 Net Sales o ~30% growth in Net Sales and Adjusted EBITDA o Strong Adjusted Free Cash Flow 1. See Appendix for reconciliation to GAAP 2. Defined as Adjusted EBITDA less Capex Significant Year Over Year Growth 16


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June Year to Date Bridge 2014 – 2015 Net Sales Macro Effects Growth ($ in Millions) 35.5 408.6 (2.6) 0.9 Volume/Mix Price Other $1,624.2 (19.5) (39.3) $1,565.4 Metals 2015 YTD $1,181.8 2014 YTD Grede Acquisition (Jan - May 2015) 2015 YTD Constant Foreign Currency FX & Metals Macro Effects Adjusted EBITDA1 Growth 65.0 12.8 (2.6) 1.1 (4.3) $294.7 (3.0) (5.5) $286.2 Metals 2015 YTD $222.7 2014 YTD Grede Acquisition (Jan - May 2015) Volume/Mix Price Performance/ Perf/Econ/Cost Economics/ Cost Reductions Reductions SG&A/Other 2015 YTD Foreign Currency Constant FX & Metals 1. Non-GAAP, see Appendix for reconciliation to GAAP Strong Year to Date Results Impacted by Macro Effects 17


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2015 Quarterly Cash Flow Highlights ($ in Millions) Q1 Adjusted EBITDA1 Q2 June YTD $132.6 $153.6 $286.2 Less Capex (60.7) (54.3) (115.0) Adjusted Free Cash Flow1,2 $71.9 $99.3 $171.2 Q1 Q2 June YTD $16.0 $39.8 $55.8 4.9 28.5 33.4 Term Loan Prepayments 10.0 20.0 30.0 Change in Working Capital/Other, Net 65.3 30.5 95.8 o Strong Q2 and June year to date Adjusted Free Cash Flow Memo Items Cash Paid for Interest Cash Paid for Income Taxes, Net o Semi-annual registered notes interest payment in April (next one in October) o Timing of tax payments o Seasonal working capital build in first half 2015 o $30 million in term loan prepayments 1. Non-GAAP, see Appendix for reconciliation to GAAP 2. Defined as Adjusted EBITDA less Capex Strong Free Cash Flow June Year to Date 2015 18


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2015 Guidance Ranges 2015E 1 Guidance Net Sales $3.0 - $3.15 billion Adjusted EBITDA2 $520 - $560 million Capital Expenditures $210 - $220 million Adjusted Free Cash Flow3 $310 - $340 million o Incorporates assumptions included on page 23 of Appendix 1 Represents reaffirmation of guidance provided earlier this year 2 See Appendix for reconciliation to GAAP 3 Defined as Adjusted EBITDA less CapEx, utilizing high and low ends of Adjusted EBITDA and CapEx Earlier Guidance Remains Unchanged 19


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Driving Value Long – Term Net Sales Target of > $4 Billion June YTD 2015 2018 and Beyond o Secure growth through new business wins o Ramp-up of new programs o Execute on vertical integration/cross-selling o Capture value-added, powertrain content o Leverage cash flow model o Continue global expansion 18.3% Adjusted EBITDA Margin and $171.2 million Adjusted Free Cash Flow Benefit from Expected Growth in Powertrain and SafetyCritical Components $30 million in Debt Reduction $0.09 Dividend per Share for each Q1 & Q2 performance Record new business wins >$500m1 Take advantage of Cross-Sell Opportunities Capitalize on Global Scale and Capabilities 1. Through YTD June 2015. New business is peak annual Net Sales. Programs generally launch and ramp up over the next 5 years. 20


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Q & A SESSION


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APPENDIX


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Assumptions Industry Production / Assumptions 2015E Light Vehicle SAAR North America ~3% Light Vehicle SAAR Europe ~1% Light Vehicle SAAR Asia ~3% NAFTA Heavy Truck Class 5-8 ~7% Industrial Market FX Rates Continued weakness End of Q2 2015 12/31/14 Rate USD to Euro 1.12 1.22 Mexican Peso to USD 15.55 14.78 Chinese Yuan to USD 6.13 6.14 Korean Won to USD 1,111 1,096 Metals Market – Chicago #1 Bundles $265 per gross ton $347 per gross ton IHS June 2015 FTR and ACT June 2015 FX Rates and Metals Market Rate June 2015 23


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2015 Second Quarter Financial Results by Segment ($ in Millions) HHI Metaldyne Grede MPG Cons. Net Sales $262.1 $300.7 $237.4 $800.2 53.6 52.4 36.1 142.1 % of Net Sales 20.5% 17.4% 15.2% 17.8% Adjusted EBITDA1 59.3 56.4 37.9 153.6 % of Net Sales 22.6% 18.8% 16.0% 19.2% Gross Profit 1. See Appendix for reconciliation to GAAP 24


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YTD June 2015 Financial Results by Segment ($ in Millions) HHI Metaldyne Grede MPG Cons. Net Sales $506.2 $578.4 $480.8 $1,565.4 96.0 95.0 79.6 270.6 % of Net Sales 19.0% 16.4% 16.6% 17.3% Adjusted EBITDA1 106.1 103.5 76.6 286.2 % of Net Sales 21.0% 17.9% 15.9% 18.3% Gross Profit 1. See Appendix for reconciliation to GAAP 25


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GAAP Reconciliation MPG RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED FREE CASH FLOW Quarter Ended June 28, June 29, 2015 2014 Net income attributable to stockholders Income attributable to noncontrolling interest Net income Six Months Ended June 28, June 29, 2015 2014 $ 44.1 15.4 76.5 38.0 - 0.1 0.2 0.2 $ 44.1 15.5 76.7 38.2 $ 26.9 22.6 54.5 42.0 0.4 - 0.4 0.3 19.9 Addbacks to Arrive at Unadjusted EBITDA Interest expense, net Loss on debt extinguishment Income tax expense 14.2 9.4 31.5 Depreciation and amortization 58.8 47.8 115.2 90.5 $ 144.4 95.3 278.3 190.9 Unadjusted EBITDA Adjustments to Arrive at Adjusted EBITDA (Gain) loss on foreign currency $ (3.9) 1.8 (8.9) 1.7 Loss on fixed assets 0.2 0.5 0.4 1.2 Debt transaction expenses 1.6 1.6 1.7 2.8 Stock-based compensation expense 4.2 3.3 7.5 4.6 - 1.2 - 2.2 Non-recurring acquisition and purchase accounting related items 0.4 18.1 0.1 18.1 Non-recurring operational items 6.7 1.2 7.1 1.2 Adjusted EBITDA $ 153.6 123.0 286.2 222.7 Capital expenditures 54.3 27.3 115.0 58.1 $ 99.3 95.7 171.2 164.6 Sponsor management fee Adjusted Free Cash Flow 26


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Combined Non-GAAP Financial Information MPG SCHEDULE OF COMBINED NON-GAAP FINANCIAL INFORMATION Quarter Ended June 28, June 29, 2015 2014 Net sales $ Six Months Ended June 28, June 29, 2015 2014 800.2 1,565.4 1,181.8 — Grede pre-acquisition net sales 641.3 176.1 — 426.2 Combined Non-GAAP net sales $ 800.2 817.4 1,565.4 1,608.0 Adjusted EBITDA $ 153.6 123.0 286.2 222.7 — 28.8 — 66.5 Grede pre-acquisition Adjusted EBITDA Combined Adjusted EBITDA $ 153.6 151.8 286.2 289.2 CapEx $ 54.3 27.3 115.0 58.1 — 4.3 — 11.8 $ 54.3 31.6 115.0 69.9 99.3 95.7 171.2 164.6 — 24.5 — 54.7 99.3 120.2 171.2 219.3 Grede pre-acquisition CapEx Combined CapEx Adjusted Free Cash Flows $ Grede pre-acquisition Adjusted Free Cash Flows Combined Adjusted Free Cash Flow $ 27


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GAAP Reconciliation Guidance 2015 Guidance Low End of Range Net income attributable to stockholders Income attributable to noncontrolling interest Net income 2015 Guidance High End of Range 112.4 140.3 0.4 0.5 112.8 140.8 106.0 106.0 48.3 60.3 234.2 234.2 501.3 541.3 (8.9) (8.9) 16.6 16.6 11.0 11.0 520.0 560.0 Addbacks to Arrive at Unadjusted EBITDA Interest expense, net Income tax expense Depreciation and amortization Unadjusted EBITDA Adjustments to Arrive at Adjusted EBITDA Gain on foreign currency Stock-based compensation expense Non-recurring operational items and other (1) Adjusted EBITDA (1) Non-recurring operational items include impairment charges associated with the closing of the Berlin, Wisconsin facility, disposed operations, restructuring costs, debt transaction related expenses and other. 28


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